I recently met a friend for a hike and she shared that she made $35K more in 2023 than she expected. Great news…you would think. The challenge was that she had nothing to show for the additional income. In other words she spent every cent of it plus some. She asked my advice on how she could do better. Here’s what I told her:

• Live below your means. In other words, act like you make a lot less than you do. Too often we garner a larger paycheck and instead of “paying ourselves” we literally go on a shopping spree of life…bigger house, nicer car, the latest phone etc. Ask yourself, “What do I really need?” and “Does all that stuff really make me happier, anyway?”
• Put all her various accounts into one investment account. Every time she left a job, she left her 401k with her previous employer. It essentially sits there and is forgotten. If she pulled all of them together, she could create a wholistic plan and be more strategic with her money. I am sure you’ve heard the mantra of being diversified in your portfolio. Well an easy way to accomplish this is to know what you have and have easy access to it…all of it.
• Shopping…many a person’s downfall. And my friend is no exception. I suggested that she pause…when she sees something instead of immediately buying it, walk away. Think about it. Check out what is already in her closet. Determine how much she will really wear it. And after all that analysis, if she still wants it or “needs” it, then buy it! More likely she will have moved on and forgotten that must-have item.
• Have a plan and work your plan. Have an end game and then work towards it. All of this financial responsibility should be working towards a goal so I suggested to her that she needs to know what her goal is.
• Live a little, too. All work and no play would make life pretty boring and dry and there is nothing wrong with a reward here and there. Instead of a bunch of little rewards (clothing, coffee, etc.) how about one really big, glorious reward like a fabulous trip?!

Share your ideas in the comments!